Agmt 2006 Mercy Housing California XXXIII (4)

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qualifications, experience, financial capability and expertise of Developer and its principals are of particular concern to the Agency. It is because of those qualifications, experience, financial capability and expertise that the Agency has entered into this Agreement with Developer. No voluntary or involuntary successor in interest to Developer shall acquire any rights or powers under this Agreement, except as hereinafter provided. 7.2 Prohibition on Transfer. Prior to the expiration of the term of the Ground Lease, Developer shall not, except as expressly permitted by this Agreement, directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively "Transfer") of the whole or any part of the Property, the Project, the Improvements or this Agreement without the prior written approval of the Agency which the Agency may withhold in its sole and absolute discretion. Any such attempt to assign this Agreement without the Agency's consent shall be null and void and shall confer no rights or privileges upon the purported assignee. In addition to the foregoing, prior to the expiration of the term of the Ground Lease, except as expressly permitted by this Agreement, Developer shall not undergo any significant change of ownership without the prior written approval of Agency. For purposes ofthis Agreement, a "significant change of ownership" shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership and lor control of Developer, taking all transfers into account on a cumulative basis. 7.3 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions set forth in this Article shall not be deemed to prevent: (i) the granting of temporary easements or permits to facilitate development of the Property; (ii) the dedication of any property required pursuant to this Agreement; (iii) the lease of individual residences to tenants for occupancy as their principal residence; or (iv) assignments creating security interests for the purpose of financing the rehabilitation or permanent financing ofthe Project or the Property pursuant to the approved Financing Plan (subject to the requirements of Article VIID or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest. In addition, Agency shall not unreasonably withhold its consent to the following Transfers provided that the requirements of Section 7.4 are satisfied: (a) a transfer from Developer to Mercy Housing, Inc., a Nebraska not-for-profit corporation ("Mercy") or a nonprofit corporation or limited liability company which is under the direct control or under common control with Mercy or in which Mercy is the sole member ("Controlled Affiliate"); (b) transfer of the initial limited partner's interest in Developer to an investor limited partner; (c) a transfer of the general partner's interest in Developer to a Controlled Affiliate; (d) any transfer of limited partnership interests in Developer in accordance with Developer's agreement of limited partnership (the "Partnership Agreement"), provided that the Partnership Agreement and/or the instrument of Transfer provide for development and operation of the Property and Project in a manner consistent with this Agreement; (e) the removal of the general partner by the investor limited partner for a default under the Partnership Agreement, provided the replacement general partner is reasonably satisfactory to Agency; or (f) a transfer to a partnership in which Mercy, Mercy Housing West, a California nonprofit public benefit corporation ("Mercy California"), or a Controlled Affiliate is the general partner. For purposes hereof, an "Affiliate" shall mean an entity that controls, is controlled by, or is under common control with Developer, and "control" means the ownership of fifty percent 803698-6 23